research back in half an hour for you with more news here though it's all interview show spotlight with al going off topic today is how the revolutions throughout the middle east have reshaped the international security landscape to stay with us. twenty years ago the largest country in the. disintegration of the. fleet which had been trying. to teach began a journey. where did it take. paolo again and welcome to. the show on part. and today my guest

is. the european economic turmoil the global markets spiraling down and experts say another recession may be just about to start. is facing financial turbulence to start sliding in the ruble losing ground against the dollar and you officials insist it's all natural and there's no need to do. so is the second recession jeff a scary story or should we really want. to ask one of the most prominent. of the new comic school. russian officials say the national economy has almost recovered after the recent recession where prices are bouncing around a relatively high price on the g.d.p. is growing again but the global markets are unstable and the fluctuations in the having an effect on the russian indices yet another challenge is the resignation of

the highly respected finance minister. he has been in charge of the country's fiscal policy for more than a decade and his departure is seen as a blow to russia's financial credibility. mr greville welcome to the show thank you very much for having me thank you for being with us well first of all the latest political news is there is that the main russian political intrigue the intrigue of the. of the presidential elections in two thousand and twelve has been resolved well at least the candid from the ruling party is going to be played and reputed well this news didn't really influence the markets i mean seriously why does it mean that that that from the money point of view from the point of view of of of the economic financial games they're put in or medvedev makes no big difference i think i think there is a lesson of this question has not really calmed the market has not really

a strong message here what then you can to make policy will be because i think nobody really had any doubts that we're going to put in will continue around in the economy in the company like he used to be in the prime minister and in that sense the main question for the markets is what kind of economic policy he will be carrying out and for that we need to know big government officials in his new government and there's something that we have not had any answer to yet so soon so we should wait for that government reshuffle that we may be facing when medvedev instead of being president becomes the new young prime minister i would like to remind you that occasionally the government or shuffle actually happens before the elections even before the problem mentary election so maybe a bit of shuffle actually happens before in december because what happened in two thousand and seven runs of course the government was for the. government downs of course was appointed and if you keep government ministers came in and they actually

continued through the elections years maybe it's already starting we will we know that they had one of the key figures and put in the government ministers who did in whose finance minister and deputy prime minister. he lost his job recently and do you think that may be a sign of a future reshuffle in the government the that has already started i think i think we know that cauldron will not be in the government well we don't know well we don't know yet but it looks like he's not going to be in the government he said he doesn't want to be in the government however we don't know who is replacing him because the current replacement the acting finance minister under apparently is a temporary replacement so they will be looking for a more politically connected politically important figure who will be actually run in this very key ministry and is it true you should know that rumor there that couldn't didn't want to stay in the government because because he expected to

become prime minister i think i think that almost there now nothing this is plausible explanation but i think judging by their public statements both called in an invidious man before me and before calling was actually quite unhappy by the military spending program which was mainly and lobbied by the president in bed of president medvedev was correct saying that both prime minister putin and links in minister of finance alex equal that it actually signed up in doris this program and they actually signed on to this program but yet it is through that called in the employ of this program and innovative was the key person to push for reform of fathers was to get in on the eve of his resignation he said the following i quote the global economy is facing a decade of slow growth that will make it harder for countries to service debts russia faces risks of a recession if the us and europe economies fall into recession and quote how probable is this negative recession scenario i think i think when we say slow

economic growth is actually a positive scenario when you know whether perhaps sorry that it was a slogan or the recession was well a politician of such a scale says slow. on the growth he means doubtful you know maybe i think i think i think if the politicians in europe and the us do their job very well still gotta face in the decay of slow economic growth simply because they're dead over all arch they will have to cut expenses raise taxes and at least in the short to medium run the growth will be slow but i think a cauldron is right in. if you're into a risk of this is a very tangible risk of a recession something like we had in two thousand and eight where in major financial institution collapse and there is a financial panic which results in what's called a liquidity squeeze and it's very hard to morrow in land and therefore there is an implication for the real economy and the recession and that will of course mean

a lot for usher because when people start thinking about to be a six they try to invest less in the risky assets and russia is a risky company so they'll be a withdrawal of capital from russia and so in russia financial crisis will be felt even in even part of that well we mentioned the united states the political debate in the united states over dealing with the country's debt has almost brought the world to the verge of another global recession and here's a story on that from spotlight healing energy media. it has become natural for the u.s. to live beyond its means the country's debt has been accumulating for decades the reason of the debt ceiling by congress it's been done almost every year since nine hundred sixty the procedure has long been from ality this year how would. you this been given up for the sequel to politico through which the u.s. debt holders in suspense at one point there seemed little possibility that the

republicans and democrats would come to an agreement and the danger of. real is just a hole that would style last minute debt ceiling do you didn't exactly turn. now to be a happy ending to this school three days off to reach standard and poor's downgraded the country's credit rating for the first time in its history to you wes almost two hundred which three days the markets reacted with panic and the sharpest since the financial crisis three years ago. the crisis in the you were sent out strong shock waves throughout the international markets including russia even though the situation even for this there belies there's still the fear of the debt ceiling crisis beating and the west go back into recession and that field will only grow until i read the call and long term solution to the debt problem is found in washington. well actually i don't share your learning the. worries the

bad bad bad about the dollar because because i suspect that what happens in the states is more a game power game then real life though what's happening in europe may be more worrying because they're trying to hide the problem here do you agree i fully agree here i think i think you're right the show really warty by the u.s. she mentioned. the u.s. was facing default actually that somebody else was facing the risk of technical default and of course it was a sort of a game a sort of a game i think it was it was a big big negative surprise for everybody that u.s. politicians are acting saw it responsibly but yet i think was shown to be rewarded i think the new president clear he is. is in two thousand and twelve two thousand and thirteen starts now probably two thousand and thirteen starts cutting the expenditures and raising taxes bringing in their cars and all of their probably before the election so it will not really help when you present you in

a barber has no chance no you could being your new democratic president can be a bummer but usually in a presidential democracy like the us in the beginning a new presidential term the new president comes in and says i have some time let's do them for you to. i think the second term of the first couple of years of the second term is that it is the time to do to do to exist. in europe you're absolutely right the politicians have lost credibility you mentioned could have been seen things which are probably more diplomatic i think in your of this game went too far and i think politicians have been slow in doing too little too late and i think they've lost a lot of credibility i think there are risks are very high and i think we shouldn't only would involve greece i think greece greece destruction in a default solid any given think we should worry about bigger countries such as spain and italy and eve. they can tag and from greece is not is not is not prevent them from spreading to spain and italy and then i think will will be facing

a real problem i don't think it's too late now i think there are still a number of things that there can be done in europe but i think judging by previous acts of politicians we should be what it human to new economic policy that we may expect from a new government in russia. putin i have a quote here also mentioned that the new government a quote will have to take unpopular steps to deal with the global financial tormato end quote so said so put in the store it is i will not all know love the deep fried little bit here the new prime minister will have to take the popular stance what does he mean by this and i think i think he means something that mr calderon has mentioned many times. you just called it americans living beyond their means to russians on paper and live within their means we do have a budget deficit but it's limited we also have very little that we have an easy or

fun but this is only because oil prices high and low price comes down russia suddenly will face the reality that russia's been living beyond its means and for example pension system is not balance over the next over the next ten. years or so rushing in to completely redesign its pension system and somehow bring its house in order because what we are doing now is sustainable at one hundred twenty or one hundred forty dollars a barrel but it will not be sustainable if oil prices are even sixty dollars a barrel so. the new economic school spotlight should be will continue about the possible because of the problems with all things you say with the.

very first verses of the bible is that all human beings are created but sentimental came in god's image and it doesn't say just jews or not it is. sixty to seventy percent of what i did as a common soldier in the occupied territories was to do with the turds doing what we call making our presence felt to go out should somebody so they are not in some doors run to the other corner and they don't know how religion and nationalism not just judaism have been a part of the problem they've been part of what leads to. bloodshed if you want to bomb and kill thousand four hundred people in a month and you want to expect that this will have no effect until the feet you have to be either extremely naive or extremely stupid to hear a religious jew calling another joke and not the way they really did it.

welcome back to spotlight on american novel and just to remind you that my guest in the studio today is sitting gig leave the rector of the new konami school mr goody if you just before the break you mentioned one twenty five dollars per barrel has the oil price that is that is reasonable for rush well. as far as i remember a couple of years ago the russian budget the budget of this country could be

sustained at a price of around seventy to eighty dollars per barrel and we said well we have two hundred three hundred but we can survive it so now today we see one twenty five one thirty not less so does that mean mean we've increased the spending that it happened it happened because the policy of mr could in the finance minister the government to put in medvedev or is it just objective reasons and i think i think i think of the person responsible eventually of course for the report in the us his government his policy and i think even he would tell purpose absolutely i think i think for us that was a reaction to the crisis but then. clearly understands that his political support is based on their ability to raise material standards and even standards of russian population and if needed he spends more and more and you mentioned seventy eighty dollars per barrel if we compare today's situation to your two thousand and eight

lehman brothers collapse and that crisis and i would remind you that before that year of say year two thousand and seven the russian budget would be balanced at fifty five dollars for i don't know the times where no price was one percent. it was awful but i remember times when we said thirty thirty's or thirty one we will survive exactly and this is growth in just five four years from fifty five to one twenty five shows the level of spain the impression government has to throw into the economy of government companies to be leasing spendings much as inclusions what it is spending what we're not increasing the military budget we are increasing we are increasing military budget already. said we shouldn't crispino to imagine how we should increase even more it increased and that we will increase even more if we will and this is why mr calderon is not is not happy about this policy we will spend on infrastructural pensions. by almost a factor of one and

a half we raced and we raised spending on the police and there there are all all avenues of spending very rushed is actually spending more and more and more and part of that is because i think the call on the call more the russian government is to sustain the popularity through more spending well. the finance minister the former finance minister he was labelled to be a liberal he characterized the liberal the liberal wing of the russian public policy makers russian government. was his financial policy really liberal and are we facing the end of the liberal finance policy in which its financial policy will be rather characterized as conservative and responsible rather than liberal because it is not the job of finance minister to be liberal or not his job is to keep the budget balanced or in surplus or no prices high to pay for say for

the reign of the women prices goes down and in that sense he did his job he did his job especially we'll see five years to go through that crisis many men after the crisis spend you did not go down. we're going to the why does everybody call it a liberal because he was very vocal in barged in this he was very critical of our all the stance and he eventually stepped down which actually showed that he didn't like what what's happening i think the liberal policies should be done by somebody else and president medvedev gave the speech in st petersburg in june which could be called a liberal speech where president would have said state capitalism is not my approach my approach is part of it is ation to figure lation improving investment climate decentralization of economic and political decisions that would be a liberal in a liberal leaning in the military budget of which president may dispose of the other day other facts could actually have sold so well i don't really know we increasing how we increasingly will too but we are increasing the military budget

we are not privatizing even though there's been a number of speeches and prime minister putin also said i'm against state capitalism but we only see the increase of the presence of the state in the economy and we include receiving could be used spending by the government we see increased regulation so in that sense unfortunately we have not seen the new economic policy both men of a different put in have been talking about some way to go to the moon to get the money for more of their it's a good question that's a good question russia can borrow a lot but i think if oil price goes down there what happened because of a global recession and that's the situation you mentioned also kept an outflow of cattle exactly there will be the situation russia will and will not be able to borrow a lot simply because the investors will not like the indian to countries like russia well. we've been talking here now for about fifteen minutes and i get the impression that we are. walking around the classic

question which some called guns versus butter you do have is it true is it would rush is facing today guns or butter that's a good question i think i think we don't really know whether russia needs a lot of guns because i think nobody in their in their sober mind would see the. russian space in threat from neda but that's another issue i think one issue is we need to leave within our means and your critics pond and t.v. and then we're stuck in the us living beyond their means now being financed by the standard and poor's there and downgrade in and also the markets think russia should also understand that there is a difference though between the u.s. and russia u.s. has a more than two hundred scientists of service and government that flexible market economy developed financial system so if they live beyond their means it's not a disaster russia doesn't have a currency like dollar and so if russia and i'm tired of cash we've seen that

happen in eight years i should say they mean done that and then we're going to see as we've seen the ventless of the soviet union twenty years ago we've seen the default in russian and you need there to me actually happen in the russia if if if russia runs out of cash that may actually have a serious economic and political implications but will russia have to borrow who said russia can borrow russia can borrow a lot so so i know a lot of specialists are watching our channel today maybe right now how would they should they expect that this country would be borrowing money since the launch is not if there is a global recession or even if they just oil prices goes down substantially and russia will have to borrow and in principle russia has a very low debt burden compared to european or only european countries sort of the united states or japan yet. it's going to be a risky asset and i think russia will be able to borrow just

a little bit and that means that it lot of this grants spend a lot of military spending will have to become and i think this is exactly minister called it's warning. to the president in very different prime minister putin you can promise a lot but it is very unlikely that you will actually have to default on your promise and this is this this is something that happened twenty years ago and soviet union collapsed in military spending went down by a factor of ten are so simply because soviet union and then russia didn't have cash to pay for these guns or rockets or whatever and that me well happened in russian. president medvedev said that he will continue to work on his modern ambitious modernization project even if when he when he is no longer protocols prime minister i'll be i'll continue the modernization project that modernization projects are aimed as they say into the future but they cost a lot today. are they

a significant spending in the russian budget how they could could comparable to the military budget to put the pension budget and so on and of course not when you're talking about the present available space very projects like scoll cover and other related projects there are not a bit of monkey smaller than actually the two order of magnitude smaller than the military program and then that sounds our pension pension spending these are completely different things this is not whether they will be saving money you know they will not be able to save a lot of money by cutting this project so i think i think most of the revenue sources will be privy to zeeshan and i think russian government will have to sell its crown jewels and it is very unfortunate the russian government has not done and before been stock prices and oil prices were high unfortunately as it is very likely that the russian government will sell the government stakes in ross near treaty because better bond. from when the oil prices law and therefore the market

will not be that much for this essence but the russian government will have to look at well experts say that june the last twelve months since the order to move last year russia has been experiencing a capital flight amounting to about five percent of the g.d.p. what are the fundamental reasons for for the outflow of capital work well i know you have already mentioned that people would not like to invest in this country but why why do russian capitalists move their room money away that's a very good question and i think it is especially striking given that the outside world is not doing that well and given the huge opportunities for investment in the russia the fact that investment is actually the russian investor themselves don't invest in russia but they are mining our design of the guys who know how to do business in because i'm sure they were born in the though the language actually know how how everything moves here compared to europe no reason we just mentioned europe and travel years of travel and yet the russian investors take money out why

big probably because investment climate is more than great corruption is high but ridiculous risk is high in the scope of expropriation is high and we don't know or what the economic policy of the new government will be as far as i know this far as i understand the best the russian carefulness can do what i reckon is losing so you guys are going to march when they move their money away to the west they only have this saving their money they're not making a lot of money there they're making their money here in their own country there they just say these are so this has europe is you are becoming like a savings bank for the russian oligarchs not not not necessarily and there is some troubles actually reduced crisis in europe a lot you can buy you can buy stock in europe for a fraction of what or what used to be and that's. is there even though the market economic situation is so bad i think when we're talking about investment i'll fly thing this is the indication that something is really wrong in the us. in economy right now or in russian politics i would say that political risk and of course

corruption and it's for appreciation are issues that in the subset of most what about thank you thank you very much and just to remind that my guest on the show today was so gay greed wrecked through all the new economic school spotlights wildlife would be back with more fresh and calm and song was going on and then outside russia until then stay on our sea to take it.

a deadly situation develops in north and kosovo as nato implements shoot to kill orders to demolish roadblocks built by locals near a disputed checkpoint. people living in tripoli take to the streets of former rebels carrying guns in the city of people in one of the few remaining could be strongholds of suffer from a deepening a humanitarian crisis. also operation occupy wall street grows in the us against inequality and corporate influence while people's fury toward the police increases its following a series of arrests and cases of brutal behavior. and the media makes its judgment on russia's political future in the wake of dimitri majid if interview averse decision not to seek a second term.